The finding from the Organisation for Economic Co-operation and Development OECD) came as prime minister Rishi Sunak warned his cabinet of a bleak winter ahead, due to soaring inflation, strike threats and spiralling NHS waiting lists. Britain’s prospects were sharply downgraded by the intergovernmental think tank, which forecast GDP will shrink by 0.4 per cent in 2023 and grow by just 0.2 per cent in 2024. As recently as September, it was expecting the UK economy to flatline next year.
The OECD also said that the UK was vulnerable to blackouts over the coming months, warning: A particularly cold winter could risk supply disruptions, exposing the economy to rolling power cuts.” Labour Treasury spokesperson Pat McFadden said the figures showed the UK was the only one of the OECD’s 38 member-states whose economy was not expected to return to pre-Covid levels by 2024.
The twice-yearly Economic Outlook report showed the UK lagging behind every G7 country in 2023 and 2024, while its GDP forecast was worse than any member of the larger G20 group apart from Sweden and sanction-hit Russia, whose economy was predicted to slump by 5.6 per cent next year.
“Today’s figures from the OECD are yet more evidence of the Tories’ 12 years of economic failure,” said Mr McFadden. This is the Tory doom loop. A low growth spiral leading to higher taxes, lower investment, squeezed wages and poor public services. And they have no plan to get us out of it.”
The OECD blamed labour shortages and untargeted” energy support for painful inflation in the UK, forecast to peak at the end of this year around its current level of 11.1 per cent and remain above 9 per cent into early 2023, before easing to 4.5 per cent by the end of next year and 2.7 per cent in 2024.
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